SBP Achieves Record Profit of Rs3.4 Trillion in FY24

KARACHI: The State Bank of Pakistan (SBP) has achieved a remarkable milestone by posting a record profit of Rs3.4 trillion for the fiscal year 2024 (FY24). This impressive figure not only marks a significant increase from the Rs1.1 trillion earned in the previous year but also provides crucial financial support to the government, which has been facing cash shortages.

According to the audited annual accounts of the SBP for FY24, the central bank has emerged as the government’s largest profit generator, outpacing potential earnings from trade or industry. This development is particularly noteworthy given the challenging economic environment characterized by high interest rates.

Topline Securities CEO Mohammed Sohail highlighted that the unprecedented interest rate of 22% has not been beneficial for the overall economy. However, he emphasized that the SBP’s substantial profits will play a vital role in supporting the government’s financial needs. With the government expected to spend Rs9 trillion on debt servicing in FY25, the transfer of 80% of the SBP’s profit, amounting to Rs2.72 trillion, to the federal government will be crucial.

Mr. Sohail pointed out that the combination of higher interest rates and a stable rupee has enabled the SBP to achieve this remarkable profit. He noted that the overall liquidity of the government has improved, which is a positive sign for the economy. This improved liquidity was evident when the government rejected all bids for treasury bills this week, raising less than half of its target through the auction of Pakistan Investment Bonds.

The SBP’s record earnings not only reflect the bank's robust financial health but also underscore its critical role in supporting the government during challenging times. As the government navigates its financial obligations, the SBP’s profits will be instrumental in stabilizing the economy. This situation serves as a reminder of the interconnectedness of financial institutions and government operations, highlighting the importance of sound economic policies and effective management of resources.